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State could pay for professional advice for financially ‘stressed’ entities like towns of Clifton, Clare and Ogdensburg and Potsdam schools

Posted 4/27/14

A bill to reimburse financially stressed New York municipalities that hire financial consultants is on the table. The proposal, aimed at helping local governments across New York such as the towns of …

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State could pay for professional advice for financially ‘stressed’ entities like towns of Clifton, Clare and Ogdensburg and Potsdam schools

Posted

A bill to reimburse financially stressed New York municipalities that hire financial consultants is on the table.

The proposal, aimed at helping local governments across New York such as the towns of Clare and Clifton and Ogdensburg and Potsdam schools improve their long-term budget planning, has been introduced by state Comptroller Thomas DiNapoli.

“Long-term budget planning is vital to the fiscal health of our localities,” said DiNapoli. “The tax cap and our state’s continued slow economic recovery underscore the need for accurate, balanced budgets reflecting realistic multi-year financial plans. State policymakers must continue to do their part to help localities find and implement real, lasting solutions. This proposal will help encourage municipalities to take action by offering them assistance in dealing with a potential impediment to these efforts,” he said.

DiNapoli’s proposal would allow counties, cities, towns and villages identified as fiscally stressed to be reimbursed by the state’s Financial Restructuring Board for Local Governments for all or part of the costs associated with long-term budget planning.

To date, DiNapoli’s Fiscal Stress Monitoring System has identified a total of 142 municipalities in some level of fiscal stress. This includes the St. Lawrence County towns of Clifton and Clare, and Ogdensburg and Potsdam schools districts among 16 counties, 18 towns, five cities, 16 villages and 87 school districts so identified.

Multiyear financial planning is a tool that will enable these entities to develop revenue and expenditure trends, establish long-term priorities and goals, and take into consideration the impact of near-term budgeting decisions on future fiscal years, according to DiNapoli’s press release. It also allows officials to assess alternative approaches to financing operations.

DiNapoli said these types of plans will allow residents and elected local officials to better understand the impact of their fiscal decisions over time. They can then decide what program funding choices to make in advance, avoiding the need for unpredictable tax increases or dramatic budget cuts.

For a copy of the proposal, submitted to both the Assembly and state Senate, visit http://www.osc.state.ny.us/legislation/2013-14/oscb35.htm

The proposal is part of the comptroller’s fiscal stress initiative that includes the creation of a Fiscal Stress Monitoring System for local governments. The system, implemented last year, uses financial indicators that include year-end fund balance, cash position and patterns of operating deficits to create an overall fiscal stress score which classifies whether a municipality is in “significant fiscal stress,” in “moderate fiscal stress,” is “susceptible to fiscal stress,” or “no designation.”